Shipments increased by 54.5% y/y
In January-October 2024, the Ukrainian scrap industry increased exports of ferrous scrap by 54.5% compared to the same period in 2023, to 226.97 thousand tons. This is evidenced by the data of the State Customs Service.
In October, shipments of raw materials abroad decreased by 0.9% compared to the previous month, but increased by 55.4% compared to October 2023 – up to 24.55 thousand tons. The average monthly volume of scrap exports for the first 10 months of 2024 amounted to 22.7 thousand tons, compared to 14.7 thousand tons in 2023 and 3.8 thousand tons in 2022.
In January-October, the main volume of raw materials was exported to Poland – 198.39 thousand tons. A small part was exported to Greece (22.18 thousand tons) and Germany (5.8 thousand tons).
Revenues from exports of raw materials in October 2024 amounted to $7.16 million tons, which is 6.6% less than in the previous month and 65% more than in the previous year. In January-October, it amounted to $71.86 million (+70.7% y/y).
Thus, despite the increased demand for raw materials from domestic steelmakers, Ukraine’s scrap exports have grown significantly since the beginning of 2022. The increase in shipments is taking place in the context of complicated scrap collection due to hostilities, as most scrap procurement enterprises were located in the temporarily occupied territories or in the war zone before the full-scale war.
An additional factor putting pressure on the scrap market is the lack of sales of scrap by one of its main suppliers, Ukrainian Railways. The railroad operator stopped selling scrap in September 2023, which had an extremely negative impact on the market and the entire Ukrainian steel industry.
Given the difficulty in collecting raw materials, the massive export of scrap abroad threatens the stability of the Ukrainian steel industry and the implementation of plans to increase steel production. According to the Ukrainian Association of Secondary Metals (UAVtormet), 250-300 thousand tons of scrap will be exported from Ukraine by the end of 2024. At the same time, 182.48 thousand tons of scrap were exported in 2023, and 54.07 thousand tons in 2022.
As Oleksandr Kalenkov, President of Ukrmetalurgprom, previously noted, scrap is exported through the European Union, which has a preferential export duty of €3 per ton, and from there the raw materials are redirected to real consumers in Turkey. He emphasized that exporting raw materials directly to Turkey would cost €180 in export duties, and the Ukrainian budget has already lost more than UAH 350 million.
As GMK Center reported earlier, in 2023, the volume of ferrous scrap collection in Ukraine increased by 28.1% to 1.27 million tons compared to 2022. Over the same period, scrap supplies to steelmakers amounted to 1.034 million tons (+15.4% y/y). Exports increased by 3.4 times compared to 2022 to 182.48 thousand tons.
